Program Integrity: Best Practices from Leading Practice Sites

February 2015

HRSA’s commitment to program integrity extends beyond the bounds of individual covered entity audits. The agency uses the results from these audits to develop technical assistance for entities to help all stakeholders maintain compliance. To that end, this month, we are sharing the best practices that Leading Practice Sites from the 340B Peer-to-Peer Program employ to avoid the three major areas of non-compliance found in audits. As you will read, Leading Practice sites have proactive mechanisms in place to encourage a culture of compliance.

Eligibility

Updating information on the OPA 340B database is critical to program integrity. Covered entities are required to have correct information in the 340B database, including contact information, contract pharmacy information, and Medicaid billing information. 

Mary Pham, chief operating officer/chief compliance officer at the Center for Inherited Blood Disorders (CIBD), has a robust process for maintaining accurate information in the 340B database. 

Pham recommends that covered entities designate an employee for maintaining and updating the 340B database. “There needs to be assigned responsibility,” said Pham.  

In addition to on-line records, CIBD maintains a "program integrity binder" as a back-up and verification source, while also serving as a historical record. 

On a quarterly basis, CIBD conducts a review of the manual and on-line records are checked to ensure that they match. 

The 340B team at CIBD has also developed and documented communication protocols to inform employees of any necessary database change(s) (such as a closing of an offsite outpatient site).

Heidi Larson, business manager at Hennepin County Medical Center, uses the 340B database as an education tool during annual recertification. Larson took the time to go through each field of the 340B database with Hennepin’s CEO as a way to explain the 340B Program and its requirements.

Diversion

Covered entities cannot resell or otherwise transfer 340B drugs to ineligible patients. This practice is known as diversion. To mitigate the risks of diversion, entities should employ extensive self-auditing practices.

Felicity Homsted, director of pharmacy at Penobscot Community Health, performs routine self-audits for all areas that utilize 340B drugs. Within their internal pharmacies, Penobscot performs daily and monthly audits of prescriptions written by outside providers to confirm prescriber eligibility.  

In addition, Homsted states: “as far as our contract pharmacy goes, we audit five percent of all of our claims on a monthly basis,” and a mechanism is in place to correct any claims if necessary.  

Homsted further provides that “having frequent audits allows us to identify issues in real time, resolve them and prevent them from becoming a bigger problem.”

In addition to self-audits, it is imperative for covered entities to have adequate controls in place to ensure that 340B prescriptions are not dispensed to ineligible patients. 

“Before our entity can even procure drugs, patient eligibility verification is critical,” said Pham.  

Staff at CIBD use a workflow chart for most of their procedures in order to confirm that the patient definition is being met as well as to ensure that patients and vendors understand their processes.  In addition, all dispensed 340B drugs are verified (in terms of location, patient status, and provider eligibility) and stamped for accuracy. This manual review process ensures 340B eligibility. “We want every prescription and person to be traceable,” said Pham.  

Pham also updates her provider list on a quarterly basis.

Duplicate Discounts

The HRSA Medicaid Exclusion File (MEF) is a mechanism created by HRSA to help stakeholders comply with a specific 340B statutory provision: that drugs purchased at 340B prices must be excluded from Medicaid rebate requests to drug manufacturers.

Homsted suggests that employees should have an in-depth understanding of the Medicaid billing practices at their organization. “Better education will prevent inappropriate charges from going to Medicaid,” said Homsted.  

The covered entity should routinely review their organization’s MEF on the 340B database to ensure that the entity is billing consistently with their designation on the MEF.  This ensures the entity’s Medicaid billing status is accurate and up-to-date (whether carving-in, if you use 340B drugs for your Medicaid patients, or carving-out, if you use non-340B drugs for Medicaid patients).  

Penobscot audits all pharmacy Medicaid claims manually on a nightly basis to prevent duplicate discounts.  A staff member runs a report and codes each item of inventory to the payer to ensure that 340B inventory was not dispensed when Medicaid was billed.  If an error is identified, Penobscot will correct the claim.

Covered entities should also form a strong partnership with their state Medicaid agency to ensure compliance with the duplicate discount prohibition.  

Larson reaches out to the Pharmacy Program Manager at the Minnesota Department of Human Services to confirm that Hennepin is not in violation of duplicate discounts.  “I also ask if there is there anything I need to know from the state’s perspective that I should or should not be doing.  I would recommend calling the Department of Human Services for their state and ask if there is someone there that has some oversight or has worked with the 340B Drug Discount Program,” stated Larson.

In addition to considering the best practices described above, covered entities should review and update policies and procedures for all facets of the 340B Program.  There are resources available to 340B stakeholders that will help improve program integrity within their covered entity.